By Steven Ralston, CFA
Colt Resources (TSXV:GTP.V) announced the analytical results of five recently completed drill-holes completed on the Monfurado gold deposit located in its 100%-owned Montemor Regional gold exploration concession. Significant intersections include 5.31 g/t Au over 7.56 meters and 2.80 g/t Au over 10.08 meters. The Montemor concession encompasses 728.22 square kilometers in the Alentejo Region of southern Portugal.
Four shear corridors lie within the Montemor Regional concession, namely the Monfurado, Mourel, Gouveia and Grou belts. In January 2012, Colt Resources began a field-based exploration program targeting three of the four shear corridors (Monfurado, Mourel and Gouveia). During the first half of 2012, prospecting, pilot soil geochemical surveys, stream sediment surveys and trenching were completed. The Monfurado area is the first target area to be drill tested in the Montemor Regional concession by Colt Resources.
At least six scout diamond drill holes have been completed along the Monfurado shear-zone corridor in the Monfurado area. High-grade gold mineralization was intersected over 7.56 meters grading 5.31 g/t with hole no. 4 and over 1.32 meters grading 4.70 g/t with hole no. 6. The company’s current model assumes that high-grade gold mineralization occurs where conjugate sets of shears intersect, which is totally consistent with historical exploratory results. Low-grade gold mineralization was encountered over longer distances with hole no. 1 intersecting 0.52 g/t Au over 14.25 meters and hole no. 2 assaying 0.48 g/t Au over 14.23 meters.
The assay results confirm the presence of near-surface gold mineralization in a specific area previously mined for iron. Also, the drilling results correlate well with historical holes that were utilized in a JORC-compliant resource estimate on the Montemor concession conducted for Iberian Resources in late-2005, in which DataGeo Geological Consultants estimated an inferred gold resource of 10,438 ounces in the deposit located at Monfurado. Management is continuing the company’s exploration efforts to confirm and expand upon this historical resource estimate for this particular deposit.
The company’s interpretation of the results indicates a tabular deposit of some regularity with a 40º-to-45º northeasterly dip. The gold mineralization remains open down-dip and along-strike in all directions. Step-out drilling is being performed to test the down dip and strike extension.
Our valuation model for Colt Resources only utilizes select gold and tungsten deposits at Boa Fé and Tabuaço, based on NI 43-101-compliant estimated resource reports and historical drilling results. The Monfurado gold deposit is not yet part of our valuation model; however, we expect that ultimately a NI 43-101-compliant resource estimate on the Montemor Regional concession will be forthcoming.
We reaffirm our Outperform rating and price target of $1.35, which is based on an estimated share value of attributable resources.
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